U.S. Gulf, Shale Output Decline Spurs 2% Gain In Oil Prices
By Zainab Calcuttawala - Jul 03, 2017, 3:00 PM CDT
Permian
Plateauing U.S. output caused oil prices to see a 2 percent gain on Monday, continuing the longest streak of daily price gains after Baker Hughes reported the first decline in active U.S. rigs in 24 weeks.
Brent prices were up $0.64 or 1.31 percent at the time of this article’s writing. West Texas Intermediate barrels stood $0.75, or 1.63 percent higher, as well.
"It’s all about market sentiment," Commerzbank analyst Carsten Fritsch told Yahoo Finance. U.S. Gulf of Mexico producers saw a 100,000 barrel per day production from tropical storms and maintenance over the past two weeks, spurring eight straight days of price gains. "These... (temporary) factors outweigh the sharp increase in OPEC oil production in June... and the continued increase in Libyan and Nigerian output at least at the moment," he added.
Analysts note that the boom in active rigs in the Permian and Bakken is nearing an end, as the added production worsens the glut and puts downward pressure on already bearish prices. This makes new shale output more difficult to actualize.
HZN Price at posting:
4.2¢ Sentiment: Buy Disclosure: Held
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